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Better Farming Ontario magazine is published 11 times per year. After each edition is published, we share featured articles online.


Cover Story: The New Ethanol

Tuesday, June 3, 2008

Grain-based ethanol is under fire for contributing to world food shortages. Many now hail cellulosic as the answer to the world's mounting fuel crisis. But is this 'next generation' biofuel an ideal solution or a troubling compromise?

by Mary Baxter

It is a Thursday night in early April and Tom Cox is talking about ethanol. In particular, he is discussing a largely farmer-owned ethanol production venture, which goes by the name of Integrated Grain Producers Co-operative (IGPC) and which could begin operation in Aylmer as early as this month.

Facing a group of about 20 in a small meeting room on the lower level of a Woodstock hotel, the ruddy, open-faced Brant County cash cropper and grain elevator operator runs through his points without skipping a beat.

He outlines the factors which motivated the formation of the co-operative. He touches on financing. He delivers a blow-by-blow account of the construction of the facility. He even ventures into the nitty-gritty of how ethanol is made, delivering up his subject through numbers, measurements, charts, graphs and diagrams with a scientist's precision.  

There's a reason why Cox is so knowledgeable about ethanol – he's been involved in the IGPC project since it began in 2002. For much of that time, he's been chairman of what is touted to be the largest co-operative startup in Canadian history. So you've got to wonder just what Cox's take is on cellulosic ethanol.

In front of an audience whom he's encouraging to invest in IGPC's grain-based ethanol plant, he handles the subject diplomatically. He admits that it won't be long before ethanol derived from cellulose or woody organic matter such as grasses, trees and agricultural waste, will become commonplace. (By 2022, the U.S. government's renewable fuels standard calls for the production of at least 16 billion tons of cellulosic ethanol. That's one billion more tons than the standard outlines for traditional grain-based ethanol production).

He observes that U.S.-based ethanol manufacturer Poet is now building a cellulosic plant in Emmetsburg, Iowa, which will complement the traditional grain-based ethanol production of the plant. Corncobs, which comprise seven per cent of a corn plant's aboveground biomass, are the proposed feedstock. The company is working with equipment manufacturing giants such as John Deere and Case IH to determine what modifications might be needed to harvest the cobs.

"Right now the costs of producing cellulosic are still considerably more than producing grain-based but the difference between the two is changing quickly, so it's very likely that we'll see more and more movement in that direction. And we'll see plants that most likely use two feedstocks," he predicts.

Away from the podium, Cox's response is consistent, if a little more disparaging. "The joke in ethanol is that you can make anything out of cellulose except money," he says.
Nevertheless, if the energy sector were Hollywood, there's no question cellulosic ethanol would be the new "it" girl.

In 2007, the U.S. Department of Energy dedicated $1 billion to cellulosic ethanol research and development. As of April, there were 21 demonstration or commercial plants being proposed, under construction or operating in the United States and at least six in Canada. Those within the biofuels industry are hailing it as the "next generation" biofuel.

Meanwhile, with food crises looming and concerns building over what the use of grain to produce ethanol is doing to the world's commodity markets, grain-based ethanol is definitely losing its mojo.

In April, media outlets worldwide were blaming grain-based ethanol for a sudden rise in world food prices.

In November, the Guelph-based George Morris Centre warned that grain-based ethanol production in Canada "undercuts a far-reaching strategy to convert Canadian feed grains into meat and livestock for export to an increasingly prosperous world, and could hardly be occurring at a worse time for Canada's beleaguered beef and pork supply chains."

Last fall, Quebec declared it would no longer support grain-based ethanol development. Here in Ontario, a policy to support grain-based ethanol holds firm, but the subject may be touchy in government circles. After repeatedly assuring Better Farming he would compile a response to written questions concerning cellulosic ethanol and its impact on grain-based ethanol, an official with the Ontario Ministry of Agriculture, Food and Rural Affairs' policy division failed to deliver a response by press time.

Boon or bane

Like grain-based ethanol, cellulosic ethanol's sex appeal lies in its eco-friendly characteristics. Unlike its grain-based cousin, however, cellulosic ethanol doesn't have a world food crisis skeleton hanging in its closet.

"Everybody wants to get to cellulosic ethanol; that's certainly obvious," says Robin Speer, a spokesperson for the Canadian Renewable Fuels Association (CRFA). "In terms of greenhouse gas reduction, using waste products and, potentially, substantially reducing the price at the pump as oil supplies shrink – everybody wants to get there."

Here in Ontario, however, opinion is divided on whether this newest approach to making ethanol will end up being an energetic boon or bane for the fledgling alternative energy industry.

Huron County farmer Don Nott sees the entry of cellulosic ethanol onto the scene as an opportunity to add value to the switchgrass crop he established three years ago. At the time, he thought that selling pellets for furnaces would be his crop's main market. Now, as he prepares to harvest his first full crop, that market has all but vanished. "You have to have the right kind of furnaces," he points out.

Also, unlike ethanol production, the province hasn't provided any specific financial backing for bioheat ventures. (Nott also offered oat hull pellets as fuel but had to take them off the market.

As grains rose in value, so too did grain's byproducts. That price hike "basically priced us out of the marketplace today," he says).

Nott has not given up on switchgrass. A shift in emphasis to cellulosic ethanol production will help promote the idea of dedicated energy crops such as switchgrass, he says.

Yet there are lots of unknowns about how cellulosic ethanol production might shape crop production. One key question has to do with what will end up being used to supply the production process.

For the U.S. plants being proposed, only four will use residue from commercial crops, such as corn or wheat. Six will employ multiple feedstock sources, eight will use wood and one proposes to process citrus peels. Commodity crop residues, forest residues and solid urban wastes are the feedstocks under consideration at the Canadian plants.

Bill Deen, a cropping systems agronomist with the University of Guelph, says that the advantages of annual commercial crops, such as corn, include flexibility in rotation and a level of familiarity for growers. But these crops have their drawbacks. They need a lot of inputs. Remove too much residue from the fields and "we are going to run into issues over time of declining soil carbon, declining soil structure," he says. In terms of soil health, it will have "a downwards spiral effect."

When it comes to a dedicated energy crop, perennials such as Nott's switchgrass or miscanthus fare better, he suggests. Indeed, University of Illinois studies are showing that miscanthus holds a lot of promise as an energy feedstock. Plant yields are nearly 30 tonnes a hectare, or two to three times more productive than switchgrass.

Miscanthus has other advantages, Deen says. Its nutrient efficiency is high because above-ground nitrogen, phosphorus and potassium are better recycled than those in corn. The crop, like other grass species favoured for cellulosic production, can sequester significant amounts of carbon in the soil. For the farmer, that may eventually mean earning some extra income in providing carbon credits. It's also good for soil structure. Other than during its first years of establishment, the crop needs little fertilizer.

Where to grow energy crops is another subject of debate. Many argue that the perennial crops' appeal is that they can occupy marginal lands. Deen isn't convinced. "It is possible that our highest yields are going to occur with miscanthus on prime land," he says.

"It could be that is going to be most profitable for a grower to produce miscanthus on prime land."


Competing with DDGs?

But is it really feasible for such crops to displace others currently being grown on prime land? It's doubtful, for example, that a crop like miscanthus would displace tomato production in Chatham-Kent and Essex Counties, Deen admits. But could it displace corn or soybean production? Could it replace marginal land used for forage or pasture? Maybe yes, maybe no.

Al Mussell, an economist with the George Morris Centre, sees cellulosic ethanol production and energy crops holding the most promise for Ontario's underdeveloped regions. In eastern Ontario, where livestock and dairy production are in decline and there are pockets of abandoned farmland, "something like this could be an excellent thing."

There are other challenges and market implications surrounding cellulosic production.
In April, John Lawrence, an economist at Iowa State University, proposed that one of these might be that the cellulosic process might have to compete with Dried Distillers' Grains (DDGs), a by-product of grain-based ethanol production, for the same ingredients. He suggests that the net effect would be the creation of a "floor price" for DDGs, which is being marketed to livestock producers as a replacement for corn.

Mussell downplays the possibility. DDGs have a very low inclusion rate in most livestock's diet, with poultry being able to consume the most at up to 20 per cent of their total diet. Moreover, once cellulosic ethanol production comes online, it will "swamp" grain-based ethanol, take the pressure off grain being used as biofuels and, in the process, reduce the costs of grain for livestock producers.

But he did raise concerns about how energy crops would be harvested, collected and transported. He also points out that the amount of volume of feedstocks the plants would consume would be "phenomenal." The number of trucks needed to haul a crop such as switchgrass would be "very significant" and have implications for road wear and safety.

Then there's the challenge of shipping the end product. Ethanol's corrosive properties play havoc with pipes, he notes. As for the small matter of making the production process affordable, Roger Samson, executive director of REAP-Canada (Resource Efficient Agricultural Production), holds out little hope and argues that government money is better spent elsewhere.

Samson, who has followed the development of cellulosic ethanol production since the early 1990s, argues that "the projections in terms of cost of production just haven't arrived."

He points to Iogen Corporation's March announcement of plans to build a $500 million plant in Saskatchewan. (Iogen operates the world's first cellulosic demonstration plant, which is in Ottawa). The company has applied to the federal government's $500 million Sustainable Development Technology Canada fund to provide financing for 40 per cent of the plant's costs. Firing up technology that is not yet commercially proven with these sorts of megabucks stokes Samson's frustration.

That's tax-payers dollars going into the plant, he says, noting that the $200 million which that 40 per cent represents could put 100 pellet-burning plants into operation in Ontario. "We don't understand the rationale of why they (governments) are picking certain technologies as winners and leaving behind technologies that are actually more effective in terms of creating energy security and mitigating greenhouse gases in Ontario."

Robin Speer, CRFA's spokesperson, says that cellulosic ethanol production is facing challenges similar to those of any other new industry. The costs of technology are high and it can be difficult to obtain financing. That's why the federal government's funding is needed.

Grandfathering grain ethanol

Speer is also confident that logistical issues such as those Mussell raises will be resolved. Brazil is already building a massive pipeline to transport ethanol to its cities, he points out, and the United States is also considering the possibility. "A lot of those issues are not a real concern," he says.

So what will become of grain-based ethanol production once the new generation arrives?
Speer is confident that "grain-based technologies are improving to the point where they will be producing a lot more." The next generation of biofuels "is going to supplement or complement what's going on in that (grain-based ethanol) industry. Those grain and oilseed plants are going to exist for some time."

Mussell agrees, although for somewhat different reasons. In the United States, the crafters of legislation will grandfather in a certain amount of grain ethanol "so that all their pals who run ethanol plants can continue to do what they're doing," he predicts. "That may not be exactly how it plays out, so maybe I'm a little cynical, but that's what it sure looks like."

Cox too isn't all that concerned.

Like Speer, he points out that research efforts into improving the efficiency of grain-based ethanol production continue. Moreover, IGPC has the space to expand and having both approaches to ethanol production eventually onsite is a possibility – provided cellulosic production becomes more affordable.

Yet, he stresses, commercial cellulosic production is still a long way off, despite the flurry of announcements about construction plans. Barring Iogen's Ottawa demonstration plant, no large-scale commercial plants yet exist in Canada or North America. BF

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Sidebars 1: Co-firing wheat shorts with coal

On the shores of Lake Erie, at one of Ontario's four remaining coal-fired electricity plants, wheat is taking on a whole new meaning.

For the past two years, researchers in Nanticoke's environmental department have exploring how to co-fire wheat shorts with coal. Gerry McKenna, the plant's environmental advisor, says that representatives from the Ontario ministry of agriculture and the Ontario Millers Association first approached them in 2005 with the idea.

"It took about a year before we actually did a test burn and it looked like the product did hold some promise as a biofuel," he says, noting that the impact on equipment had to be evaluated and that they also had to explore what other properties would be needed to co-fire the material with coal. They're still in the testing phase with the focus now on how to inject it into the boiler, how it should be burned and what impact it might have on other boiler parts.

John Earl, a spokesman with Ontario Power Generation (OPG), says that the idea of combining biofuels with coal is being used in Europe. There, the fuel makes up between five and 25 per cent of the final mixture to be burned with bioproducts being burned ranging from wood chips to agriculture products.

At Nanticoke, they're looking at a mixture of 25 per cent bioproducts. Wood pellets have also been tested and OPG has tried grain screenings at its Thunder Bay plant,
McKenna says how much power you get depends on what sort of heat is released. Wheat shorts have slightly less heat than coal so more have to be burned to get the same amount of power.

Other products, such as wood, wood chips and dried distillers' grains, have a higher heating value, although all have lower values than coal. "So there is a bit of a penalty there in terms of the amount of energy you get out per pound of fuel," McKenna says.

At this point, the researchers are dealing with fuels ready to burn. For this reason, they haven't looked at switchgrass, which is being used in the United Kingdom, along with miscanthus. Both of these crops would need processing before they could be burned, he explains.

Roger Samson, executive director of REAP Canada (Resource Efficient Agricultural Production), says that burning biofuels makes a good alternative for coal but suggests that efficiencies are better found in smaller-scale operations, where the focus is on providing heating rather than electrical generation plants such as Nanticoke.

"They would have a hard time paying farmers a reasonable price for the fuel with their low conversion efficiency," he points out.

But, he says, biofuels may make economic sense for fueling cement factory furnaces or district energy plants, which may provide heating for a number of buildings within a confined geographic area – especially if the facility would otherwise have to pay transportation costs on top of the price tag for coal. The best application would be greenhouses, he says.

Bill Deen, a cropping systems agronomist with the University of Guelph, is also a fan of the smaller- scale approach. In the case where a biomass crop is used to heat a nearby greenhouse operation, the "economic value of that biomass crop is retained locally," and the farmer gets the value of offsetting the operation's energy requirements. BF

Sidebar 2: High hopes for miscanthus as a biofuel

Move over corn and switchgrass. When it comes to energy crops, miscanthus, a relative of sugar cane, may become a front contender.

According to Bill Deen, a cropping systems agronomist with the University of Guelph, miscanthus is a perennial grass species currently being used fairly extensively in Europe. On this side of the ocean, it has primarily been served as an ornamental species.

A number of years ago, the University of Illinois began to evaluate the grass as a fuel for direct combustion. Two years ago, after obtaining funding from BP to look at ethanol production, the university began evaluating it for cellulosic production.

So far, the university's studies are revealing some encouraging results. Test averages over three years are showing that it is two to three times more productive than switchgrass. Yields of 12 tons an acre outstrip corn biomass yields (both grain and stover), which average seven tons per acre.

This year, the University of Guelph is also taking a close look at the plant. Studies are under way to look at how it reacts to Ontario's climate and what its yield potential across various types of regions in the province might be. Others are evaluating the performance of different genotypes of the plant in the province, and looking at its performance as an energy crop intended for burning compared to switchgrass, big bluestem grass and other species. BF

Sidebar 3: A $200,000 grant to test sweet sorghum

A southwestern Ontario couple is championing sweet sorghum as an energy crop which can supply either cellulosic or grain-based ethanol production.

Over the past two years, Jim and Lisa Highfield have been looking into the potential of the cane-like plant. In the United States, the plant is grown for forage, silage and sugar.

Last summer, at the family's farm in Lambton County, the couple grew test plots using two different varieties of the crop. This summer, with the help of a federal grant of more than $200,000, they are planning on developing six to eight test plots. They'll also be keeping an eye on how best to plant, harvest and transport their crop.

Developing a pilot facility where both ethanol production processes are used is the next step. If all goes according to plan, a small commercial facility generating 20 to 30 million litres annually will be the end goal.

"It's quite a bit smaller than a traditional ethanol plant," admits Lisa. That's because the couple believe a smaller facility is more suited to community involvement with farmers buying into the program and delivering the sorghum right to the plant.

"We're trying to develop a sustainable model where everything from transportation to the amount of water we use in the process to how we manage the waste products is done in a sustainable manner and a smaller footprint." BF

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